One of the barriers affecting consumers’ decision to purchase electric vehicles is the issue of price. The good news is that Gartner, a market analysis company in the US, has predicted that by 2027, the cost of producing electric vehicles will become cheaper than vehicles with internal combustion engines.
Large batteries, new technologies, and development costs have contributed to the high prices of electric vehicles. However, innovations in modern manufacturing techniques and improvements in electric vehicle design will quickly help reduce the cost of battery-powered cars.
According to experts at Gartner, OEMs (Original Equipment Manufacturers) are gradually introducing improvements to simplify production costs and assembly time, such as introducing gigacasting techniques (producing a large part of the car using a solid piece of metal instead of welding together many small components); such new methods will force traditional manufacturers to update early to avoid being left behind.
Unfortunately, these new technologies may also affect customers’ repair bills and insurance costs. Although Tesla’s gigacasting technology has allowed the company to gain a competitive advantage in terms of price compared to other electric vehicle manufacturers, the cost of repairing Tesla vehicles is also very expensive.
When other car manufacturers follow Tesla in implementing gigacasting, Gartner predicts that the average cost of repairing serious damage to the vehicle’s body or battery will increase by 30%. This could lead to more debts and even cause some insurance companies to refuse coverage for certain vehicles.
Nevertheless, global sales of electric vehicles are expected to continue to rise in the coming years. Gartner estimates that the number of electric vehicles delivered will increase to around 18.4 million in 2024 and 20.6 million in 2025, a significant increase from 15.4 million in 2023.
In addition, Gartner also made observations about the competition in the electric vehicle industry. The market analysis firm noted that many startup companies have heavily invested in electric vehicle production, expecting fast and easy profits in the emissions-free automotive field, which is currently being favored and strongly promoted.
However, the incentives related to electric vehicles are gradually being phased out, and market instability will cause many companies to be unable to withstand the challenges. Gartner predicts that there will be consolidation in the industry and 15% of startups will either go bankrupt or be acquired by 2027.
